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Which of the following statements regarding financial statement disclosures is FALSE?

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There is nothing inherently wrong with related-party transactions, as long as they are fully disclosed.

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Management must disclose potential losses from ongoing litigation if the related liability is highly likely.

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All information relating to the company must be disclosed in the financial statements, regardless of materiality.

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Events occurring after the close of the reporting period that could have a significant effect on the company’s financial position must be disclosed.

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CFE - Financial Transactions and Fraud Schemes Exam - Question 28

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